Breach

Question 1

Breach

Answer 1

A breach occurs when the promisor is under an absolute duty to perform that has not been discharged and then fails to perform in accordance with the contract
-Common law requires a material breach or substantial performance resulting in a minor breach
>Willful breach is likely material
-A material breach discharges the non-breaching party’s duties and gives them immediate right to all remedies for breach of contract
-A minor breach only results in right to (setoff) damages
-Anticipatory repudiation is treated as immediate breach of contract

Question 2

Timeliness of performance

Answer 2

Failure to perform within the time stated in the contract is not a breach unless time is of the essence

Question 3

Perfect tender rule

Answer 3

If goods of their delivery fail to conform to the contract in any way, the buyer may reject all, accept all, or accept any commercial units and reject the rest

A Buyer’s right to reject is cut off by acceptance:
-After reasonable opportunity to inspect goods, the buyer indicates to the seller that the goods conform or they will keep goods despite nonconforming nature
-Failure to reject goods; or
-Act inconsistent with the seller’s ownership (i.e., eating nonconforming apples unless the apple has an unknown defect like worms)

A Buyer’s right to revoke acceptance:
-When goods have a defect that substantially impairs the value; and
-Reasonable belief that the defect would be cured or difficulty in discovering defects/seller assured buyer the goods conformed

Question 4

Seller’s right to cure under perfect tender rule

Answer 4

Seller’s right to cure
-If the buyer has rejected goods because of defects, the seller may within the time originally provided for performance “cure” by:
1. giving reasonable notice of their intent to do so; and
2. making a new tender of conforming goods that the buyer MUST accept

Seller can cure beyond original contract time only when buyer rejects nonconforming goods that the seller reasonably believed would be acceptable because of:
-prior dealings with the buyer; or
-seller could not have known of the defect despite proper business conduct

Question 5

Installment contract exception to perfect tender rule

Answer 5

Buyer can only reject installment contract if the nonconformity substantially impairs the value of that installment and cannot be cured

The whole contract is breached only if the nonconformity substantially impairs the value of the entire contract